The coronavirus has made industries and brands pivot beyond what they could imagine doing in the next 5 years. The closing down of borders also taught us the need and the steps to be future ready, self-reliance and building an ecosystem that will help us survive today and for any other crisis to come.
Innovation in manufacturing within Indian boundaries is long pending. The country has moved leaps and bounds when it comes to IT. During the pan-demic we saw major and young brands across industries jump leaps and bounds in how they restarted their proaduction, distribution and marketing process. There was a major overhaul in the way companies are functioning now, right from consulting firms to those requiring manufacturing setup.
In the past five years and more we have seen an increasing focus by the government and also brands, now, on the Make in India scheme but also with the launch of the AtmaNirbhar campaign, while it became evident as to how Indian leadership realises the value in self-reliance in all aspects, execution and results are due. The electronics industry in India is worth USD 118 bn as per estimates carried out in 2019-20 (Invest India). The television industry in India is also particularly important especially post pandemic wherein people ended up spending most of their time indoors and moved back to consuming content on larger screens.
India's share in global electronics manufacturing has only grown from 1.3% in 2012 to 3.6% in 2019, despite the evident intent of the leaders to grow the same. The electronics industry plays a major role in our fiscal deficit ratio since the industry is the 2nd biggest importer of core raw materials required in the process of mfg TVs, Laptops & mobile phones (panels & semiconductors), after petroleum. The Indian electronics industry imports INR 3.7 trillion worth of raw materials.
The consumption of electronics in India is only going to grow and we need to ensure that we become a powerhouse of innovation when it comes to hardware along with software. The TV consumption rate measured by the units sold per year will be at 18 million units in the next two years or less. While this is promising news for all brands Indian and international, TV prices are seeing a hike in its price.
Post pandemic raw material costs for the electronics industry have grown by 400%. Panels for 32’’ inch screen which came at a cost of USD28, now costs over 100USD. Manufacturing hub- China controls these prices and this resonates with companies across the globe.
There is no country that is close to challenging China’s capabilities and output strength, however, given the promising figures with respect to India’s growth in consumption patterns and a digitally literate, also young, populace foreign brands are turning to India for sales. What the nation can concurrently offer these brands for investing on our land is an encouraging policy landscape. Regulations that will add value for investors in the industry.
The industry has been in a dire crisis with regard to raw materials such as panels and semiconductors ever since the rage of COVID began but what we require to grow from this is a new player that can counter China’s hold on price control and raw material manufacturing. This will also enable players to allow through and through backward integration while producing in India. Additionally, the entire screen dependent electronics industry will be able to bring about a huge overhaul in their production capabilities, enjoy security during dire situations, more skilled workforce and shorter lead cycles.
We do see a vigour in the government to put India on the global map and make it an attractive destination to invest & manufacture. The Make in India program, Atmanirbhar campaign credits these sentiments to a great extent. In fact we also welcome the move by the government wherein it is required for the players to assemble the entire product in India.
However now there is a need to speed track the on-going talks with regard to manufacturing of sophisticated raw materials especially when there is a monopoly of it. The government should also work on looping in the TV industry under the newly launched Production Linked Investment scheme- in order to ensure laser focus on one of the burgeoning industries globally.
A country as a manufacturing hub holds a lot of value and is a step in the right direction while on the
journey to establishing itself as an emerging power
The push that hardware currently requires will bond perfectly well with the innovation in softwares that is being carried out by the leaders in the business such as Google Android who lead with 72% market share. With OTT platforms launching big screen specific content, Google Android and the likes of it are upping the ante for the audience, especially when we are visiting public theatres less and with the release of larger than life movies such as those by Marvel and so on.
With so much happening in the TV software realm, India can take a front seat in developing an ecosystem that is conducive to manufacture raw materials in thus cutting down production costs and allow for brands to co-create within the system. These steps will also help us attack the now and then issues regarding employment and skilling/up skilling the labour force.
A country as a manufacturing hub holds a lot of value and is a step in the right direction while on the journey to establishing itself as an emerging power.